The founding members of the TCF family are T-cell factor-1 (Tcf-1) and lymphoid enhancing factor-1 (Lef-1). In adult mammals, Tcf-1 is uniquely expressed in T lymphocytes, while Lef-1 is expressed in T cells and early B cells. During murine development, however, expression of Tcf-1 and Lef-1 occurs in complex overlapping patterns in many tissues. The unique in vivo function of Tcf-1 and Lef-1 have been explored by gene disruption experiments. Tcf-1-/- knockout mice are severely impaired in the generation of T cells, but are otherwise normal. Lef-1-/- mice lack hair, teeth, mammary glands and trigeminal nuclei and as a consequence die around birth. As deduced from direct analyses and from transplantation experiments, the Lef-1 mutation has no major effects on the immune system. In Tcf-1/Lef-1 double knockout mice, development of T cells is completely abrogated, indicating that Lef-1 can substitute for Tcf-1 in T-cell differentiation. Factors of the TCF/LEF HMG domain family (TCFs) exist throughout the animal kingdom. It has become evident that the TCFs interact with the vertebrate Wnt effector beta-catenin to mediate axis formation in Xenopus. Likewise, Armadillo (the Drosophila ortholog of beta-catenin) is genetically upstream of Drosophila TCF in the Wingless pathway. Upon Wingless/Wnt signaling, Armadillo/beta-catenin associate with nuclear TCFs and contribute a trans-activation domain to the resulting bipartite transcription factor. In the absence of Wnt signaling, Tcf factors associate with proteins of the Groucho family of transcriptional repressors to strongly repress target gene transcription.